German luxury automaker BMW says net profit rose 14 percent in the second quarter as earnings were boosted by the new version of the 5-Series sedan.
Profit rose to 2.21 billion euros ($2.60 billion) in the April-June period from 1.95 billion euros a year earlier. The profit figure beat analyst expectations for 2.01 billion euros as compiled by financial information provider FactSet. Revenues rose 7.4 percent to 49.2 billion euros.
CEO Harald Krueger said Thursday strong earnings will ensure the company can expand its efforts in battery-powered and autonomous cars. Krueger said "huge changes lie ahead in the world of mobility and it is vital that our company is in top shape to tackle them."
Electric cars remain a small part of the market but automakers say they will become increasingly important as battery range improves, and as governments press for more low-emissions vehicles as part of efforts to fight climate change and air pollution.
BMW AG sold 42,600 electric vehicles in the quarter, up 80 percent. The company makes the i3 and i8 battery vehicles and sells hybrid versions of conventional mainstays such as the big 7-Series sedan. A hybrid uses an internal combustion engine to charge the battery and relies on both internal combustion and an electric motor in order to reduce fuel consumption.
The company is relying on its core business selling luxury vehicles with gasoline and diesel engines to generate the profits that will enable massive investment to meet expected changes in the auto industry. Electric and autonomous vehicles are seen as part of a trend in which people are less likely to own a car and order transportation through smart phones, either as part of ride-sharing or car-sharing.
The company is offering engine control software updates on more than 300,000 cars to improve diesel emissions. The voluntary measure is part of industry efforts to ward off bans on diesel cars in German cities with high air pollution levels. Diesels emit lower levels of carbon dioxide, a major greenhouse gas blamed by scientists for global warming, and get better mileage than gasoline powered cars. But they can emit more nitrogen oxide, a pollutant that harms health.
The company said it is conducting an internal investigation following a report in Der Spiegel magazine that German automakers colluded for years on diesel and other technology. The European Commission anti-trust authorities are also evaluating the report. BMW said it has not been contacted by the commission and is not aware of any formal investigation by the commission.